Spruce Power Reports Fourth Quarter and Full-Year 2024 Results
DENVER--(BUSINESS WIRE)--March 31, 2025--
Spruce Power Holding Corporation (NYSE: SPRU) ("Spruce" or the "Company"), a leading owner and operator of distributed solar energy assets across the United States, today reported financial results for the fourth quarter and year ended December 31, 2024.
Business Highlights
-- Reported 4Q revenues of $20.2 million, net loss attributable to
stockholders of $5.9 million and Operating EBITDA of $10.8 million
-- Ended quarter with liquidity position of $72.8 million in unrestricted
cash to support future growth and current operations
-- Added approximately 9,800 home solar assets and customer contracts in
2024 via NJR Clean Energy Ventures, a subsidiary of New Jersey Resources
Corporation $(NJR)$, for nearly 15% year-on-year growth, to reach
approximately 85,000 home solar assets and contracts
-- Signed first customer agreement for Spruce Pro business with ADT to
service a third party portfolio of approximately 60,000 residential solar
systems
-- Customer Satisfaction (CSAT) score rose to 83% in 2024 from 74% in 2023
Management Commentary and Outlook
"In this time of heightened uncertainty across the residential solar market, Spruce offers investors greater stability and predictability given that our business is predicated on generating long-term contracted cash flows from existing solar assets through operational efficiencies, maintenance and superior asset management," said Chris Hayes, Spruce's Chief Executive Officer. "Unlike many of our peers, we are not dependent on continuous growth in new solar installations, externally financed working capital or government support."
Hayes continued, "Spruce demonstrated important progress in 2024, driven by a targeted acquisition of residential solar systems in New Jersey and the successful launch of our third-party servicing channel, Spruce Pro. In addition, we were proud to earn a sizable increase in customer satisfaction ratings."
Hayes concluded, "As we look forward to 2025, Spruce has built a highly attractive owner-operator platform that is poised for scale and long-term value creation. We continue to advance a pipeline of growth opportunities with a focus on profitable growth and driving inflection in the cash generating ability of our Company. Further, we are focused on improving operating efficiency, which we expect to drive margin expansion."
Consolidated Financial Results
Revenues totaled $20.2 million for the fourth quarter of 2024, compared to $15.7 million for the fourth quarter of 2023. The increase in fourth quarter revenues was primarily a result of increased revenues associated with the NJR Acquisition in the fourth quarter of 2024 and recognizing revenue for delinquent customer accounts in accordance with GAAP in the fourth quarter of 2023.
Total operating expenses were $26.7 million for the fourth quarter of 2024, compared to $24.2 million for the fourth quarter of 2023. Core operating expenses, which includes both selling, general & administrative expenses ("SG&A") and operations & maintenance expenses ("O&M"), were $20.7 million for the fourth quarter of 2024, up from $17.6 million for the fourth quarter of 2023. The increases in both total operating expenses and core operating expenses were primarily attributable to higher compensation costs due to increased employee headcount, slightly offset by lower routine O&M costs in the fourth quarter of 2024.
Net loss attributable to stockholders was $5.9 million for the fourth quarter of 2024.
Management considers Operating EBITDA as a key measure in evaluating Spruce's operating performance. For the fourth quarter of 2024, Operating EBITDA was $10.8 million.
Balance Sheet and Liquidity
The Company's total principal amount of outstanding debt as of December 31, 2024, was $730.6 million with a blended interest rate of 6.0%, including the impact of hedge arrangements. All debt consists of project finance loans that are non-recourse to the Company itself.
Total cash as of December 31, 2024, was $109.1 million, including cash and cash equivalents of $72.8 million and restricted cash of $36.3 million. This is down from $172.9 million of total cash as of December 31, 2023, primarily attributable to increased O&M expenses, cash paid for the NJR acquisition, and legal expense, partially offset by proceeds from the issuance of new non-recourse debt in 2024.
Growth and Capital Allocation
Spruce is committed to maximizing long-term value for our shareholders through a disciplined approach that includes strategic acquisitions, capital expenditure projects, debt repayment, and shareholder return initiatives.
In January 2024, Spruce announced the launch of 'Spruce Pro', a brand that extends Spruce's distributed solar energy servicing capabilities into a new growth area of commercial solar.
In November 2024, Spruce acquired a portfolio of approximately 9,800 home solar assets and customer contracts, which is highly complementary to Spruce's existing asset base and funded the acquisition through a combination of cash on hand and non-recourse project level debt. Inclusive of this acquisition, the Company's gross portfolio value was $910.0 million in the fourth quarter, whereas Spruce's gross portfolio value would have been $749.0 million without the transaction, further demonstrating the value of the acquisition while maintaining disciplined cash restraint.
In December 2024, Spruce entered into a servicing agreement with a residential solar installer to provide servicing solutions to a portfolio with approximately 60,000 residential solar systems.
During the fourth quarter of 2024, Spruce repurchased 0.3 million shares of common stock at a weighted average price per share of $2.93 for a total cost of $0.9 million, inclusive of transaction costs. There was $43.8 million remaining under the Company's authorized $50.0 million common share repurchase program at the end of 2024.
Key Operating Metrics
As of December 31, 2024, Spruce owned cash flows from approximately 85,000 home solar assets and contracts across 18 U.S. States with an average remaining contract life of approximately 11 years. Combined portfolio generation for the year ended December 31, 2024, was approximately 515 thousand MWh of power. In addition, the Company is also contracted to service over 60,000 third-party owned home solar systems as of December 31, 2024. Gross Portfolio Value, on a PV6 basis as described below, was $910.0 million as of December 31, 2024.
Conference Call Information
The Spruce management team will host a conference call for analysts and investors to discuss its fourth quarter and full-year 2024 financial results and business outlook today at 2:30 p.m. Mountain Time. The conference call can be accessed live over the telephone by dialing (646) 307-1963 and referencing Conference ID 3699222. Alternatively, the call can be accessed via a live webcast accessible at https://events.q4inc.com/attendee/493158938. An audio replay will be available shortly after the call and can be accessed by dialing (800) 770-2030. The passcode for the replay is 3699222. The replay will be available until April 11, 2025.
About Spruce Power
Spruce Power is a leading owner and operator of distributed solar energy assets across the United States. We provide subscription-based services that make it easy for homeowners to benefit from rooftop solar power and battery storage. Our power as-a-service model allows consumers to access new technology without making a significant upfront investment or incurring maintenance costs. Our Company owns the cash flows from approximately 85,000 home solar assets and contracts across the United States. For additional information, please visit www.sprucepower.com.
Forward Looking Statements
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are characterized by the use of certain words or phrases (and their derivatives) such as "anticipate," "believe," "could," "expect," "intend, " "may," "opportunity," "plan," "goals," "target" "predict," "potential, " "estimate," "should," "will," "would," "continue," "likely," and similar expressions that predict or indicate future events or trends that are not statements of historical matters. These statements are based upon our current plans and strategies and management's assumptions and expectations about future events and market conditions, and reflect our current assessment of the risks and uncertainties related to our business as of the date of this release. Forward-looking statements in this release may include, without limitation, statements made in Mr. Hayes' quotations, statements regarding contracted portfolio value and renewal portfolio value, potential future acquisitions, potential future repurchases under the stock repurchase program, and the Company's prospects for long-term growth in revenues, business cash inflows and earnings. Repurchases under the stock repurchase program will depend upon market prices, trading volume, available cash and other factors, and therefore, there is no guarantee that any repurchases will be completed or as to the number of shares that may be purchased. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of the Company's existing knowledge of its business and operation, there can be no assurance that actual future results, performance or achievements of, or trends affecting, the Company will not differ materially from any future results, performance, achievements or trends expressed or implied by such forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ
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